PURNIDEVI BAGRODIA CHARITABLE TRUST, MUMBAI V. D.I.T.(EXEMPTION), MUMBAI

ITA 1637/MUM/2011

• Counselvise Citation: 163719914 RSA 2011
• Duration Of Justice: 3 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 25-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KUMAR
• Assessee Lawyers: K GOPAL
• Keywords: Charitable institution
• Section: 80G

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . , , , BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUD ICIAL MEMBER . / ITA NO. 1637/MUM./2011 ( / ASSESSMENT YEAR : N.A ) PURNIDEVI BAGRODIA CHARITABLE TRUST 61, B WING, MITTAL TOWER 6 TH FLOOR, NARIMAN POINT MUMBAI 400 021 .. / APPELLANT V/S DIRECTOR OF INCOME TAX (EXEMPTION) PIRAMAL CHAMBERS PAREL, MUMBAI 400 021 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AABTS8890B / ASSESSEE BY : MR. K. GOPAL / REVENUE BY : MR. SANTOSH KUMAR / DATE OF HEARING 09 .0 6 .201 4 / DATE OF ORDE R 13.06.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HA S BEEN PREFERRED BY THE ASSESSEE CHALLEN GING THE IMPUGNED ORDER DATED 20 TH DECEMBER 201 0 , PASSED BY THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTION) [DIT(E)], MUMBAI, PURNIDEVI BAGRODIA CHARITABLE TRUST 2 REJECTING THE ASSESSEES APPLICATION FOR GRANT OF CERTIFICATE UNDER SECTION 80G OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). 2 . FACTS IN BRIEF : THE ASSESSEE IS A TRUST, WHICH WAS FORMED VIDE TRUST DEED DATED 16 TH JUNE 1994. LOOKING TO THE CHARITABLE OBJECT OF THE TRUST, REGISTRATION / APPROVAL UNDER SECTION 12A, WAS GRANTED VIDE ORDER DATED 10 TH FEBRUARY 1995. THE ASSESSEE HAD FI LED AN APPLICATION ON 1 ST JUNE 2010, FOR GRANT OF CERTIFICATE UNDER SECTION 8 0G , AS WAS GRANTED EARLIER TO IT IN THE EARLIER YEARS. THE DIT(E), ON A PERUSAL OF THE DETAILS FILED BY THE ASSESSEE TRUST, NOTED THAT THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITA BLE ACTIVITIES DURING THE LAST THREE YEARS AND HAS NOT INCURRED ANY EXPENDITURE ON THE SAME. THE ASSESSEE, IN RESPONSE TO THE SHOW CAUSE NOTICE, SUBMITTED THAT DURING THE LAST THREE YEARS, THE TRUST HAS NOT RECEIVED ANY DONATION AND THE TRUSTEES WERE RUNNI NG INTO HEAVY FINANCIAL LOSSES IN THEIR BUSINESS AND, THEREFORE, THEY COULD NOT CONCENTRATE IN THE ACTIVITIES OF THE TRUST. HOWEVER, FROM THE FINANCIAL YEAR 2010 11, THE TRUST HAS STARTED RECEIVING DONATION AND THE SAME HAS BEEN APPLIED FOR CHARITABLE PURP OSE. THIS IS EVIDENT FROM THE PROVISIONAL INCOME AND EXPENDITURE ACCOUNT WHICH WAS PREPARED FOR THE PERIOD ENDING ON 12 TH NOVEMBER 2010. THE DIT(E), HOWEVER, HELD THAT THE TRUST HAS NOT CARRIED OUT ANY ACTIVITY FOR THE LAST THREE YEARS AND HAS NOT DEBITED ANY EXPENDITURE IN THE INCOME AND EXPENDITURE ACCOUNT. HE HELD THAT THE PROVISIONS OF SECTION 80B, HAVE BEEN PURNIDEVI BAGRODIA CHARITABLE TRUST 3 INTRODUCED WITH AN INTENTION OF CARRYING OUT CHARITABLE ACTIVITIES AND T O HELP NEEDY AND POOR PUBLIC. SINCE NO ACTIVITY HAS BEEN CARRIED OUT BY THE ASSESSEE TRUST, THE GRANTING OF APPROVAL UNDER SECTION 80G, GETS DEFEATED. HE ALSO REFERRED AND RELIED UPON THE TWO DECISIONS OF PATNA HIGH COURT IN MADANI MUSAFIR KHANA WELFARE SOCIETY V/S CIT, [2003] 264 ITR 481 (PAT.) AND VISHWA BUDDHA PARISHAD V/S CIT , [2003] 264 ITR 357 (PAT.). ACCORDINGLY, HE REJECTED THE ASSESSEES APPLICATION FOR APPROVAL UNDER SECTION 80G. 3 . BEFORE US, THE LEARNED COUNSEL, MR. K. GOPAL, ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THE MAIN REASON FOR NOT CARRYING OUT ANY ACTIVITIES WA S THAT TRUSTEES WERE FACING FINANCIAL CRISES AND FAMILY DISPUTE. MOREOVER, THE TRUST DID NOT RECEIVE ANY DONATION DURING THIS PERIOD AND, THEREFORE, NO CHARITABLE PURPOSE WAS CARRIED OUT. HOWEVER, HE SUBMITTED THAT LATER ON, ONCE THE TRUST STARTED RECEIVIN G DONATION, IT HAS ACTUALLY CARRIED OUT THE CHARITABLE ACTIVITIES, WHICH ARE EVIDENT FROM THE INCOME AND EXPENDITURE ACCOUNT FROM THE FINANCIAL YEAR 2010 11 ONWARDS. HE ALSO SHOWED SOME LETTERS FROM THE PERSONS WHO HAVE RECEIVED MEDICAL AID FROM THE TRUST. THUS, HE SUBMITTED THAT SIMPLY BECAUSE FOR A PERIOD OF THREE YEARS, NO CHARITABLE ACTIVITIES WERE CARRIED OUT, IT DOES NOT LEAD TO ANY INFERENCE THAT THE ASSESSEE IS NOT ENTITLED FOR APPROVAL UNDER SECTION 80G. REGARDING THE DECISION OF PATNA HIGH COURT, HE SUBMITTED THAT IN THE SAID DECISIONS, DESPITE THE TRUST GETTING PURNIDEVI BAGRODIA CHARITABLE TRUST 4 DONATIONS, THE SAME WERE NOT UTILISED OR UTILISED WERE NOT FOR CHARITABLE PURPOSES. THUS, THE RATIO OF THE SAID DECISIONS WILL NOT APPLY TO THE FACTS OF THE PRESENT CASE. 4 . THE LEARNED DEPAR TMENTAL REPRESENTATIVE, ON THE OTHER HAND, STRONGLY RELIED UPON THE ORDER OF THE LEARNED DIT(E) AND SUBMITTED THAT ONCE THE ASSESSEE ITSELF HAS ADMITTED THAT NO CHARITABLE ACTIVITIES WERE CARRIED OUT, NO DONATION HAS BEEN RECEIVED, THEN THERE IS NO REQUIRE MENT OF GRANTING OF APPROVAL UNDER SECTION 80G. IF, IN THE SUBSEQUENT YEARS, THE ASSESSEE CARRIES OUT ITS CHARITABLE ACTIVITIES, THEN IT MAY APPLY FOR APPROVAL FOR THE SUBSEQUENT PERIOD. 5 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS BEEN RECOGNISED AS CHARITABLE TRUST UNDER SECTION 12A, BY THE DEPARTMENT. THE ASSESSEES APPLICATION FOR GRANT OF CERTIFICATE UNDER SECTION 80G, HAS BEEN REJECTED ON THE GROUND THAT NO CHARITABLE ACTIVITIES HAS BEEN CARRIED OUT DURING THE LAST THREE YEARS. THE ASSESSEES CASE HAS BEEN THAT IT HAS NOT RECEIVED THE DONATION DURING THIS PERIOD AND, THEREFORE, NO SUCH CHARITABLE ACTIVITY COULD BE CARRIED OUT. THE CONDITIONS FOR GRANTING OF APPROVAL OF SECTION 80G, H AS BEEN PROVIDED IN SUB SECTION 5 OF SECTION 80G . IF THESE CONDITIONS ARE NOT FULFILLED, THEN THE APPROVAL CANNOT BE GRANTED. ON A PERUSAL OF THE IMPUGNED ORDER, IT IS SEEN THAT THOUGH THE REASON GIVEN BY THE LEARNED DIT(E) FOR REJECTING THE APPROVAL UNDER PURNIDEVI BAGRODIA CHARITABLE TRUST 5 SECTION 80G, IS QUITE AN APPRECIABLE GROUND , HOWEVER, HE IS ALSO REQUIRED TO SEE WHETHER THE CONDITIONS GIVEN IN SUB SECTION 5 OF SECTION 80G, HAS BEEN FULFILLED OR NOT. FURTHER, THE LEARNED DIT(E), HAS ALSO NOT EXAMINED THE ASSESSEES CONTENTION THAT IT HAS CARRIED OUT THE CHARITABLE ACTIVITIES FROM THE FINANCIAL YEAR 2010 11, WHEREIN IT HAS RECEIVED THE DONATION AND ALSO UTILISED IT FOR THE MEDICAL AID. UNDER THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE LEARNED DIT(E), WHO SHALL EXAMINE THE ASSESSEES APPLICATION AFRESH AND IN ACCORDANCE WITH THE CONDITIONS LAID DOWN IN SUB SECTION 5 OF SECTION 80G AND ALSO THE ASSESSEES CONTENTION AFTER GIVING DUE AND EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6 . 6 . IN THE RESULT, ASSESSEES APPEAL IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. 13 TH JUNE 2014 ORDER PRONOUNCED IN THE OPEN COURT O N 13 TH JUNE 2014 SD/ - . D. KARUNAKARA RAO ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 13 TH JUNE 2014 PURNIDEVI BAGRODIA CHARITABLE TRUST 6 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI